Here Are 5 Reasons Why They Didn’t Work
Before we begin, here’s a quick and simple guide to what NFTs are and how they work, in case all of it is still unclear to you (which is totally understandable).
NFTs broke into the mainstream in January 2022, when their trading volume soared to $17.6 billion, a staggering 21,000% growth compared to the previous year, according to a report by NFT analytics platform Nonfungible.com. Based on the number of cryptocurrency wallets registered, the number of active users increased from 89,000 to 2.5 million. There was a 3,700% increase in vendors and a nearly 3,000% increase in buyers, all within that period.
However, this explosive growth did not see a commensurate increase in the use cases of NFTs. The tokens have no real-world utility, and even their virtual application is limited in many ways. There’s not much else you can do with an NFT than hold on to it till you find someone who deems it valuable enough to buy it, which is precisely where the ultimate problem lies. NFTs have no intrinsic value — since demand and price are driven by speculative interest, a loss of interest will inevitably result in a price crash.
Some tokens, such as those in the gold standard NFT collection, Bored Ape Yacht Club, buy you access to exclusive content, events, and esteemed social circles. But if you can afford an 80K pixelated smart contract, you might as well join an actual upscale country club.
